What makes a nation innovative?

international innovation rankings, the Nordic countries generally score in a top position. Sweden, for example, ranks number one in the EU Innovation Scoreboard and number two in Global Innovation Index as well as the World Bank Innovation Rank.

But if you dig deeper, you will soon find that a lot of the top performing nations, including Sweden, is strong when it comes to input to innovation – but not innovation that is commercialized or launched in any market. If a country spends a lot on R&D and innovation infrastructure, the ranking position improves but the commercial output can still be pretty low. There is also a difference between countries focusing on imitation compared to cutting-edge innovations. Imitation has been the path for developing countries, but lately a feature of European countries as well.

Maybe it is time to focus a bit more on the input-output level, the number start-ups, jobs, new products and services in the market per invested R&D dollar. Top performing countries when measuring input-output levels are Israel, South Korea and the US. What’s common among them is an active national innovation agenda among politicians with strategic focus areas and prioritized market opportunities – and innovation is a defined area of responsibility included in politicians’ job descriptions. Another common denominator is universities with cutting-edge education and research, with distinct target areas and increased competitive strength as a result. Finally, they have built strong clusters around big corporations and the eco-system results in new start-ups building new commercial value. Strong clusters are of special interest as spin-offs from big corporations generally have a stronger growth than other start-ups.

A top position in an international innovation ranking may not be the answer. Innovation input without a market will not lead to international success. Innovation needs to be a top priority for national governments to build innovation and technology strategies, prioritize investments in strategic focus areas, research and clusters – and to make sure to support R&D investments that at the end of the day will be delivered to the market.